Monday, October 8, 2012

U.S. House Report Recommends Blocking Huawei and ZTE on Security Concerns

Huawei and ZTE pose a threat to the United States telecommunications supply chain and U.S. firms are advised to avoid using their equipment, according to 52-page report issued by the U.S. House of Representatives' Permanent Select Committee on Intelligence. The report follows an 11-month investigation be the committee into the companies.

The report call on U.S. enforcement agencies to investigate unfair trade practices. including Chinese state support of these key companies in the Chinese telecommunications sector. The report also recommends that Huawei and ZTE be blocked from any future mergers or acquisitions in the United States.

The report is posted online.

For its part, Huawei issued a statement saying the Committee "appears to have been committed to a predetermined outcome" and that this report "failed to provide clear information or evidence to substantiate the legitimacy of the Committee's concerns." Huawei further states that the real purpose of the reports is "to impede competition and obstruct Chinese ICT companies from entering the US market."

ZTE issued the following statement: “ZTE recognizes and fully respects the Committee’s obligation to protect US national security.  ZTE believes the Committee focused its examination too narrowly on vendor locations not on equipment security. The Committee omitted the Western vendors and their Chinese manufacturing partners, which provide most of the US equipment now in use. The Committee also overlooked the opportunity to advance universal application of the Trusted Delivery Model which protects critical telecom networks on a vendor-neutral basis.”


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